The need and importance of a child insurance plan
Most parents’expend their energy in nurturing their child and striving to provide him/her best of facilities. Parents consistently strive to earn enough to fulfill their child's desires and provide the best of infrastructural support so that the child is able to pursue his/her dreams. Why child insurance plans are becoming necessary
Education is one of the most important aspects of a child's life and no parents would compromise on it for the lack of money. However, with education getting more expensive with every passing year it makes parents wonder if they would be able to support their children’s educational needs. And also the growing need for specialization and super specializing in order to survive and sustain in the extremely competitive professional atmosphere is bothering many parents. Parents feel stressed as they need to burn many years earning money as children need financial support for a longer duration.
Besides education, marriage is another important milestone and is particularly relevant for countries like India, where the cost of marriage often exceed the cost of education. And to add to all these woes of the caring parents is the uncertainty of one's life tenure.
Buying a child insurance and child health plan can make parents free from these worries and can focus on their present.How would a child insurance plan help?
A child insurance plan enables you to regularly save and invest your savings for securing the future of your child. Most of the child insurance plans are intended to address the different financial / investment needs with regard to the child's education and marriage. A child insurance plan would provide for payout at pre-fixed intervals, which is generally associated with the expected timing of your child higher education pursuits and marriage.
Besides providing money for addressing the various needs at different stages of life, it also provides for a Risk
cover. In case of early death of the parent, the sum Assured
will be given to the child. If the child is a minor, the Sum Assured
can be managed by an appointee (spouse) till the child becomes a major. Besides the death benefit, most child policies would also offer Waiver
benefit, which is also triggered in case of early death of the Insured
parent. As per the premium waiver benefit, the insurance company would continue to pay the remaining premium till the end of the Policy Term
and the child would go on to receive the accumulated value of the policy. Types of Child Plan
You can either invest in a traditional child policy or a unit-linked child plans. In case of a traditional child policy, the insurance company would take the investment decision on your behalf, while in case of unit linked child plan, you have the option to invest your premium across asset classes where you choose the proportion of your investment into each. Under a unit linked child plan, you have the option to invest in a fund which would cover various asset classes and you may choose the proportion of your investment into each asset class, depending upon your risk/return profile. There is also Tax Benefit
under section 80 (C) and section 10(10D) for the premium you invest and the Maturity
benefit that you receive for your investment in a child policy. The best child plan
The best child plan
would ensure that it gives your child adequate risk cover, decent returns that could help your savings grow above the Inflation
rate, hence ensuring that you get the desired money at the right stage of your life for pursuing your dreams. There are a host of child plans offered by insurance companies and you may do an online comparison to choose the one that best fits your needs and would give you adequate returns to meet your child's ambitions.